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Mon 15 Aug 2011 08:00 AM

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Abu Dhabi edges out Saudi as least risky sovereign

Bahrain best performer worldwide in Q2, Dubai’s chances of defaulting tumble

Abu Dhabi edges out Saudi as least risky sovereign
Abu Dhabi has a just 6.5 percent risk of sovereign default, CMA said

Abu Dhabi has improved on its position as the least risky sovereign in the MENA region, although Saudi Arabia and Qatar are close behind, according to new research undertaken in the second quarter.

Credit market data provider CMA put the UAE capital’s chances of defaulting on its debts in the next five years at just 6.5 percent, making it the sixteenth least risky sovereign in the world.

Saudi Arabia lies one place behind Abu Dhabi, with a 6.6 percent chance of default. The least risky sovereign is Norway, with a 1.9 percent chance of default, with Scandinavian and European countries packing out the top six.

Qatar lies a further position behind Saudi Arabia in eighteenth place, with a 6.8 percent chance of default.

Gulf sovereigns in general fared well during the second quarter, after being downgraded during the regional unrest in the first three months of the year. 

Bahrain rated as the best-performing sovereign during the quarter, followed by Saudi Arabia, Dubai and Abu Dhabi. It marks a complete turnaround for the Gulf state, which was rated as the worst performing sovereign in the first quarter.

Dubai is still rated in the top 10 (at tenth place) of the most risky sovereigns, although its chances of defaulting in the next five years dropped from 24.7 percent to 21.7 percent quarter-on-quarter.

Unsurprisingly, the world’s most risky sovereign is Greece, according to CMA. The troubled European economy has an 80.6 percent chance of default, significantly higher than Venezuela, in second place, with a 51.4 percent chance.

Iraq and Egypt left the top 10 most risky sovereigns during the quarter.

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